Buying a Shipyard for $1 and …

5/20/2002

A bankrupt U.S. company that bought a shipyard from the Canadian province of Newfoundland for C$1 in 1998 has sold it to Omaha mining and construction giant Peter Kiewit Sons of Mississippi for C$7 million ($4.4 million). Friede Goldman Halter, which filed for Chapter 11 in April 2001 in U.S. Bankruptcy Court of the Southern District of Mississippi, sold the Marystown Shipyard and fabrication plant on March 27 but the price was only revealed April 16, in Friede Goldman's 2001 financial statements filed with the U.S. Securities and Exchange Commission.

Critics commented this week that Newfoundland's provincial government should have negotiated a deal with Friede Goldman under which the shipyard's assets would revert to the province if the company couldn't fulfill its obligations. Friede Goldman owed the province C$10 million in penalties for failing to provide 1.2 million man-hours of work in 1999 and 2000. The province had invested C$186 million into the shipyard before selling it to Friede Goldman.